Guest Achilles Posted June 27, 2001 Posted June 27, 2001 401(k) plan - In a plan I am performing discrimination testing, there are several people that are on a leave of abscence. They were on a leave for the entire year of 2000, therefore they have no salary to be tested. The plan & company still consider them as active, eligible employees. Generally, everyone in the test should have a salary, which is a determinant in testing. Should these people be included in the test without a salary, or excluded? I can simply enter a termed date of 12/31/1999 to exclude them, then remove the date after the testing is complete. It's a large plan, some 4,000 eligibles, so 5-6 people won't have a great impact. Any guidance would be appreciated. Thank You!
Tom Poje Posted June 27, 2001 Posted June 27, 2001 there is nothing in the regs to tell you how to handle ees with 0 comp. at last year's ASPA conference, the IRS did say it is reasonable to treat HCEs with 0 comp as ineligible for the year they had 0 comp. Therefore, it would seem reasonable to treat NHCEs the same way.
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